A couple of items from the business and economic side of things: First off, Daniel Gross over at Slate's Moneybox column has an excellent take on the stupidity of the French government's meddling in the Aventis takeover. Novartis has been producing bid-making noises, but says that the French government has to get out of the picture for it to consider getting involved. Says Gross:
"What the French and German governments are really doing here is erecting artificial obstacles to a deal. These barriers to foreign bidders drain the pool of potential buyers and hence suppress asset prices-ultimately making the target firms weaker and poorer."
Exactly right. The same kind of argument can be made against all sorts of other protectionist schemes. And no, reimporting pharmaceuticals at an artificially low fixed price does not count as free trade in my book. Free trade is when everyone markets their goods wherever they want to, charging whatever price they believe that the market will bear. We should give it a try sometime, and that goes for drugs, for wheat, for shoes and sugar and silk. The lot. That it should apply to the buying and selling of companies should be obvious, but not, it seems, in Europe.
The other thing that caught my attention was a headline in the New York Times. "Drug Company with No Products Raises 250 Million." Sounds good to me! Many of us work at companies with almost no products - does that count? Can we get, say, two hundred million on the same principle?
The company in question is Jazz Pharmaceuticals, founded by some ex-Alza folks. Mighty strange name for a drug company, guys. They're going to develop CNS drugs, but they're not going to discover any of them. All of them will be in-licensed. Now, this business plan is not insane on the face of it. The idea of a "virtual drug company" has been floating around for some years, and occasionally it comes in for a landing. Such an outfit would be, essentially, a regulatory and marketing services company, for research organizations unwilling or unable to do those tasks themselves.
But neuropsychiatric drugs are notoriously tricky. Their developmental paths are long, expensive, and have many exciting plot twists. If I were going to be an in-licensing firm, I don't think this is the street I'd choose to hang out my shingle. But hey, I drive a car that I bought before the Berlin Wall came down. These Bebop folks are the ones who just set a record for second-round financing. Good luck to 'em.